• Steve Madden Announces Second Quarter 2022 Results

    ソース: Nasdaq GlobeNewswire / 27 7 2022 06:59:00   America/New_York

    LONG ISLAND CITY, N.Y., July 27, 2022 (GLOBE NEWSWIRE) -- Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children, today announced financial results for the second quarter ended June 30, 2022.

    Amounts referred to as “Adjusted” exclude the items defined as “Non-GAAP Adjustments” in the “Non-GAAP Reconciliation” section.

    Second Quarter 2022 Review

    • Revenue increased 34.5% to $535.0 million compared to $397.9 million in the same period of 2021.
    • Gross profit as a percentage of revenue was 40.7% compared to 42.7% in the same period of 2021. The decline was driven by a shift in revenue mix from the higher-margin direct-to-consumer business to the lower-margin wholesale business.
    • Operating expenses as a percentage of revenue decreased to 28.5% compared to 30.6% in the same period of 2021. Adjusted operating expenses as a percentage of revenue decreased to 28.2% compared to 29.9% in the second quarter of 2021.
    • Income from operations totaled $65.2 million, or 12.2% of revenue, compared to $47.7 million, or 12.0% of revenue, in the same period of 2021. Adjusted income from operations totaled $67.0 million, or 12.5% of revenue, compared to $51.0 million, or 12.8% of revenue, in the second quarter of 2021.
    • Net income attributable to Steven Madden, Ltd. was $48.5 million, or $0.62 per diluted share, compared to $36.9 million, or $0.45 per diluted share, in the same period of 2021. Adjusted net income attributable to Steven Madden, Ltd. was $49.8 million, or $0.63 per diluted share, compared to $39.7 million, or $0.48 per diluted share, in the second quarter of 2021.

    Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We delivered strong results in the second quarter, with revenue and earnings growing robustly compared to the prior year and exceeding our expectations. While macro pressures have increased, making the near-term outlook more uncertain, we are confident that our core strengths – our people, brands and business model – leave us well-positioned to drive growth and create significant value for our stakeholders over the long term.”

    Second Quarter 2022 Channel Results

    Revenue for the wholesale business was $397.1 million, a 51.5% increase compared to the second quarter of 2021, with a 47.1% increase in wholesale footwear and a 65.2% increase in wholesale accessories/apparel. Gross profit as a percentage of wholesale revenue increased to 31.6% compared to 30.6% in the second quarter of 2021.

    Direct-to-consumer revenue was $135.5 million, a 2.2% increase compared to the second quarter of 2021. Gross profit as a percentage of direct-to-consumer revenue increased to 66.4% compared to 65.4% in the second quarter of 2021.

    The Company ended the quarter with 213 brick-and-mortar retail stores and six e-commerce websites, as well as 19 company-operated concessions in international markets.

    Balance Sheet and Cash Flow Highlights

    As of June 30, 2022, cash, cash equivalents and short-term investments totaled $180.5 million.

    During the second quarter of 2022, the Company repurchased approximately $34.6 million of the Company’s common stock, which includes shares acquired through the net settlement of employees’ stock awards.

    Quarterly Cash Dividend

    The Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on September 26, 2022 to stockholders of record as of the close of business on September 16, 2022.

    Reiterating Fiscal 2022 Outlook

    The Company is reiterating its fiscal 2022 guidance. For fiscal 2022, the Company expects revenue will increase 13% to 16% over fiscal 2021. The Company expects diluted EPS will be in the range of $2.87 to $2.97. The Company expects Adjusted diluted EPS will be in the range of $2.90 to $3.00.

    Conference Call Information

    Interested stockholders are invited to listen to the conference call scheduled for today, July 27, 2022, at 8:30 a.m. Eastern Time, which will include a discussion of the Company's second quarter 2022 earnings results and fiscal year outlook. The call will be webcast live on the Company’s website at https://investor.stevemadden.com. The webcast is listen-only. Those interested in participating in the question-and-answer session may register for the conference call here. A webcast replay of the conference call will be available on the Company's website or via the following webcast link https://edge.media-server.com/mmc/p/42ck36vz beginning today at approximately 10:00 a.m. Eastern Time.

    About Steve Madden

    Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo®, GREATS®, BB Dakota® and Mad Love®, Steve Madden is a licensee of various brands, including Anne Klein® and Superga®. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers and independent stores. Steve Madden also operates brick-and-mortar retail stores and e-commerce websites. Steve Madden also licenses certain of its brands to third parties for the marketing and sale of certain products, including outerwear, eyewear, sunglasses, hosiery, jewelry, watches, swimwear, fragrance, luggage, bedding and bath products as well as other select product categories. For local store information and the latest Steve Madden boots, booties, dress shoes, fashion sneakers, sandals, slippers and more, please visit www.stevemadden.com.

    Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995

    This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, “estimate”, or “confident” and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:

    • the Company’s ability to navigate shifting macro-economic environments including the potential for recessionary conditions;
    • the Company’s ability to accurately anticipate fashion trends and promptly respond to consumer demand;
    • the Company’s ability to compete effectively in a highly competitive market;
    • the Company’s ability to adapt its business model to rapid changes in the retail industry;
    • the Company’s dependence on the retention and hiring of key personnel;
    • the Company’s ability to successfully implement growth strategies and integrate acquired businesses;
    • the Company’s reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as meet the Company’s quality standards;
    • changes in trade policies and tariffs imposed by the United States government and the governments of other nations in which the Company manufactures and sells products;
    • supply chain disruptions to product delivery systems and logistics, and the Company’s ability to properly manage inventory;
    • the Company’s ability to adequately protect its trademarks and other intellectual property rights;
    • the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or the ongoing COVID-19 pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
    • legal, regulatory, political and economic risks that may affect the Company’s sales in international markets;
    • changes in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial results;
    • additional tax liabilities resulting from audits by various taxing authorities;
    • cybersecurity risks and costs of defending against, mitigating and responding to data security threats and breaches impacting the Company;
    • the Company’s ability to achieve operating results that are consistent with prior financial guidance; and
    • other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

    The Company does not undertake, and disclaims, any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments or otherwise.

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME

    (In thousands, except per share amounts)
    (Unaudited)

     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    Net sales$532,680  $394,797  $1,090,024  $753,698 
    Commission and licensing fee income 2,309   3,097   4,699   5,221 
    Total revenue 534,989   397,894   1,094,723   758,919 
    Cost of sales 317,224   227,839   649,060   449,760 
    Gross profit 217,765   170,055   445,663   309,159 
    Operating expenses 152,526   121,860   282,528   232,308 
    Impairment of fixed assets and lease right-of-use assets —   477   —   1,089 
    Income from operations 65,239   47,718   163,135   75,762 
    Interest and other expense – net (1,291)  (777)  (1,234)  (814)
    Income before provision for income taxes 63,948   46,941   161,901   74,948 
    Provision for income taxes 15,033   9,600   38,393   15,276 
    Net income 48,915   37,341   123,508   59,672 
    Less: net income attributable to noncontrolling interest 455   489   535   1,623 
    Net income attributable to Steven Madden, Ltd.$48,460  $36,852  $122,973  $58,049 
            
    Basic net income per share$0.63  $0.47  $1.60  $0.74 
            
    Diluted net income per share$0.62  $0.45  $1.55  $0.71 
            
    Basic weighted average common shares outstanding 76,556   78,899   76,902   78,968 
            
    Diluted weighted average common shares outstanding 78,714   82,061   79,190   81,981 
            
    Cash dividends declared per common share$0.21  $0.15  $0.42  $0.30 

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED BALANCE SHEETS

    (In thousands)

       As of  
     June 30, 2022 December 31, 2021 June 30, 2021
     (Unaudited)   (Unaudited)
    ASSETS     
    Current assets:     
    Cash and cash equivalents$150,929 $219,499 $262,144
    Short-term investments 29,569  44,037  40,513
    Accounts receivable, net of allowances 31,377  26,546  24,598
    Factor accounts receivable 344,716  364,982  254,545
    Inventories 306,547  255,213  125,525
    Prepaid expenses and other current assets 31,047  20,845  20,549
    Income tax receivable and prepaid income taxes 12,225  13,538  15,906
    Total current assets 906,410  944,660  743,780
    Note receivable – related party 598  794  987
    Property and equipment, net 35,004  35,790  38,213
    Operating lease right-of-use asset 85,608  85,449  97,222
    Deposits and other 4,029  4,180  4,574
    Deferred taxes 6,517  4,581  5,415
    Goodwill – net 167,959  167,995  168,426
    Intangibles – net 107,167  112,093  114,526
    Total Assets$1,313,292 $1,355,542 $1,173,143
    LIABILITIES     
    Current liabilities:     
    Accounts payable$105,130 $136,766 $91,822
    Accrued expenses 219,005  243,163  139,717
    Operating leases – current portion 31,074  30,759  33,561
    Income taxes payable 14,100  4,522  1,477
    Contingent payment liability – current portion 2,000  5,109  3,660
    Accrued incentive compensation 8,334  14,871  8,921
    Total current liabilities 379,643  435,190  279,158
    Contingent payment liability – long term portion —  6,960  4,381
    Operating leases – long-term portion 76,023  80,072  92,179
    Deferred tax liabilities 3,378  3,378  2,921
    Other liabilities 10,930  9,404  11,982
    Total Liabilities 469,974  535,004  390,621
          
    STOCKHOLDERS’ EQUITY     
    Total Steven Madden, Ltd. stockholders’ equity 833,534  812,098  774,335
    Noncontrolling interest 9,784  8,440  8,187
    Total stockholders’ equity 843,318  820,538  782,522
    Total Liabilities and Stockholders’ Equity$1,313,292 $1,355,542 $1,173,143

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In thousands)
    (Unaudited) 

     Six Months Ended
     June 30, 2022 June 30, 2021
    Cash flows from operating activities:   
    Net income$123,508  $59,672 
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Stock-based compensation 12,150   11,019 
    Depreciation and amortization 10,471   7,993 
    Loss on disposal of fixed assets 260   303 
    Impairment of lease right-of-use asset and fixed assets —   1,089 
    Deferred taxes (1,936)  359 
    Accrued interest on note receivable - related party (8)  (11)
    Notes receivable - related party 204   204 
    Change in valuation of contingent payment liabilities (4,960)  7,834 
    Gain on sale of trademark —   (8,000)
    Recovery of receivables, related to the Payless ShoeSource bankruptcy —   (919)
    Changes, net of acquisitions, in:   
    Accounts receivable (4,564)  1,365 
    Factor accounts receivable 20,589   (1,874)
    Inventories (53,222)  (24,105)
    Prepaid expenses, income tax receivables, prepaid taxes, and other assets (7,676)  (2,125)
    Accounts payable and accrued expenses (44,197)  35,836 
    Accrued incentive compensation (6,537)  5,048 
    Leases and other liabilities (3,457)  (1,765)
    Payment of contingent consideration (339)  — 
        
    Net cash provided by operating activities 40,286   91,923 
        
    Cash flows from investing activities:   
    Capital expenditures (5,263)  (2,782)
    (Purchase)/sale of a trademark (2,000)  8,000 
    Purchases of short-term investments (38,951)  (26,574)
    Maturity/sale of short-term investments 53,803   26,460 
        
    Net cash provided by investing activities 7,589   5,104 
        
    Cash flows from financing activities:   
    Proceeds from exercise of stock options 415   6,823 
    Distribution of noncontrolling interest earnings —   (2,859)
    Acquisition of noncontrolling interest —   (19,127)
    Common stock purchased for treasury (77,027)  (42,794)
    Cash dividends paid on common stock (33,389)  (24,772)
    Payment of contingent consideration (4,770)  — 
    Net cash used in financing activities (114,771)  (82,729)
    Effect of exchange rate changes on cash and cash equivalents (1,674)  (18)
    Net (decrease)/increase in cash and cash equivalents (68,570)  14,280 
    Cash and cash equivalents – beginning of period 219,499   247,864 
        
    Cash and cash equivalents – end of period$150,929  $262,144 

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    NON-GAAP RECONCILIATION

    (In thousands, except per share amounts)

    (Unaudited)

    The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.

    Table 1 - Reconciliation of GAAP operating expenses to Adjusted operating expenses    
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP operating expenses$152,526  $121,860  $282,528 $232,308 
    Non-GAAP Adjustments (1,713)  (2,764)  1,753  (9,716)
    Adjusted operating expenses$150,813  $119,096  $284,281 $222,592 


    Table 2 - Reconciliation of GAAP income from operations to Adjusted income from operations
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP income from operations$65,239 $47,718 $163,135  $75,762
    Non-GAAP Adjustments 1,713  3,241  (1,753)  10,805
    Adjusted income from operations$66,952 $50,959 $161,382  $86,567


    Table 3 - Reconciliation of GAAP interest and other expense, net to Adjusted interest and other expense, net
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP interest and other expense, net$(1,291) $(777) $(1,234) $(814)
    Non-GAAP Adjustments —   500   —   500 
    Adjusted interest and other expense, net$(1,291) $(277) $(1,234) $(314)


    Table 4 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP provision for income taxes$15,033 $9,600 $38,393  $15,276
    Non-GAAP Adjustments 399  898  (1,934)  2,708
    Adjusted provision for income taxes$15,432 $10,498 $36,459  $17,984


    Table 5 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP net income attributable to noncontrolling interest$455 $489 $535 $1,623
    Non-GAAP Adjustments —  —  —  24
    Adjusted net income attributable to noncontrolling interest$455 $489 $535 $1,647


    Table 6 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
     Three Months Ended Six Months Ended
     June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
            
    GAAP net income attributable to Steven Madden, Ltd.$48,460 $36,852 $122,973 $58,049
    Non-GAAP Adjustments 1,313  2,850  180  8,571
    Adjusted net income attributable to Steven Madden, Ltd.$49,773 $39,702 $123,153 $66,620
            
    GAAP diluted net income per share$0.62 $0.45 $1.55 $0.71
            
    Adjusted diluted net income per share$0.63 $0.48 $1.56 $0.81
            
    Adjusted diluted weighted average shares outstanding 78,714  82,061  79,190  81,981


    Table 7 - Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in fiscal 2022 outlook
     Fiscal 2022 Outlook
     Low End High End
        
    GAAP diluted net income per share$2.87 $2.97
    Non-GAAP Adjustments 0.03  0.03
    Adjusted diluted net income per share$2.90 $3.00

    Non-GAAP Adjustments include the items below.

    For the second quarter of 2022:

    • $1.8 million pre-tax ($1.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
    • $0.1 million pre-tax ($0.04 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.

    For the second quarter of 2021:

    • $8.0 million pre-tax ($6.1 million after-tax) benefit associated with the sale of a trademark, included in operating expenses.
    • $7.4 million pre-tax ($5.6 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.
    • $2.9 million pre-tax ($2.2 million after-tax) expense in connection with payments related to rent restructuring of various leases, included in operating expenses.
    • $0.5 million pre-tax ($0.4 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
    • $0.5 million pre-tax ($0.4 million after-tax) expense associated with the impairment of fixed assets and lease right-of-use assets.
    • $0.5 million pre-tax ($0.4 million after-tax) expense in connection with the write-off of an investment, included in interest and other (expense) / income, net.

    For the fiscal year 2022 outlook:

    • $7.1 million pre-tax ($5.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
    • $5.0 million pre-tax ($3.8 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.
    • $0.3 million pre-tax ($0.2 million after-tax) benefit in connection with the exit of a lease, included in operating expenses.
    • $1.5 million tax expense in connection with a deferred tax adjustment.

    Contact

    Steven Madden, Ltd.
    VP of Corporate Development & Investor Relations
    Danielle McCoy
    718-308-2611
    InvestorRelations@stevemadden.com


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